Unions rack up wins at Virgin America, Macy's

Updated 8:53 am, Friday, August 15, 2014

Flight attendants at Virgin America will begin crafting a contract with the airline after they voted to form a union at the Burlingame company.

Flight attendants at Virgin America will begin crafting a contract with the airline after they voted to form a union at the Burlingame company.

Photo: LM Otero, Associated Press

Unions rack up wins at Virgin America, Macy's

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Wednesday was a good day for organized labor in the Bay Area. Virgin America's flight attendants voted to form a union, after an on-and-off four-year battle, while the United Food and Commercial Workers Local 5 was "happy" (its word) to sign a tentative contract with Macy's, averting a threatened strike at its Union Square and Serramonte stores.

Virgin America's pro-union vote was especially significant for two reasons. Until Wednesday's vote in favor of joining the Transport Workers Union, Virgin America had been the last nonunion airline in the country. And the union victory comes one month after the Burlingame company filed for an initial public offering. One of the standard risk factors it listed in its IPO filing is that a union formation "could create a risk of work stoppages which could materially adversely affect our business."

Virgin America had not commented on the vote Wednesday afternoon beyond a statement saying, "We respect the decision by our InFlight teammates to choose third-party representation, and we will continue to work to serve the best interests of all of our teammates and our airline as we move forward."

Its executives are probably a tad disappointed - they had said they thought the attempt to unionize would fail, as it did in 2011 - and the vote wasn't even close: 58 to 42 percent, with 737 flight attendants voting. On the other hand, the airline got some good news, reporting on Tuesday a $37 million second-quarter profit, after losing $22.4 million in the first quarter.

"There may be a little bit of bitterness, but we'll get down to brass tacks because both sides want the IPO to work and for the company continue to grow," said Jeremy Schoggins, a Virgin America InFlight leader, who was one of the organizers of the drive.

Of course, the brass tacks, which the union will start addressing in the fall, will take a while to get sorted out, let alone agreed on. "The time between an election and a contract is more likely to be years, not months," said airline analyst Bob Mann of R.W. Mann & Co.

"In the short term, there's no impact on cost structures, and in the long run, a contract will probably look the same as at other airlines. This is a pattern bargaining industry, where terms are patterned on other agreements that have been made," he said. More important, he said, is for the company to keep reporting profit ahead of the IPO.

Schoggins had nothing but good to say about the prospects. "We helped to build the airline," he said. "We stand by it. We're proud to be Virgin America." He also noted that after the vote totals were announced, "we hugged and said thank you to each other." No, really, he insisted.

Shop on! What had been an impasse between union and management at Macy's - employees had overwhelmingly endorsed a strike vote three weeks ago - ended late Monday night with the union apparently getting much of what it wanted.

No details were revealed, but union negotiators said Wednesday that they achieved "significant improvements over the company's previous offer," in terms of work schedules, paid time off for illnesses and family emergencies and "significant wage increases."

"You will continue to have the best overall wages and working conditions of any of the company's stores in the country," the union told its members.

Macy's called the agreement "a fair and reasonable contract," but wouldn't comment further until the agreement was ratified by its employees. The company should be at least somewhat relieved. Right now, San Francisco is crammed with shoppers.

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